Ericsson de Panama Pays $1.753 Million to Settle Charges of Unlicensed Transshipments to Cuba

ERICSSON DE PANAMA PAYS $1.753 MILLION TO SETTLE CHARGES OF

UNLICENSED TRANSSHIPMENTS TO CUBA

WASHINGTON – The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced today that Ericsson de Panama S.A. of Panama City, Panama, has agreed to pay a civil penalty of $1.753 million to settle 262 violations of the Export Administration Regulations (EAR).

“Today’s settlement reflects the serious consequences that result when companies knowingly violate the EAR and take steps to conceal that activity,” said Assistant Secretary of Commerce for Export Enforcement David W. Mills.“Companies must maintain vigilant compliance programs that extend to subsidiaries and affiliates wherever they do business.”

BIS alleged that the violations occurred between 2004 and 2007, and that Ericsson de Panama knowingly implemented a scheme to route items from Cuba through Panama, repackaged the items to conceal their Cuban markings, forwarded the items to the U.S. for repair and replacement and then returned the items to Cuba. Classified under Export Control Classification Numbers 5A002, 4A994, 5A991, 5B991 or designated EAR99, the items’ distribution to Cuba were controlled for national security, antiterrorism, encryption, and sanctions reasons.

“While the conduct in this case was egregious, Ericsson de Panama avoided possible criminal prosecution and heavier fines by voluntarily disclosing the violations to BIS and cooperating with the investigation,” Mills added.

In addition to the monetary penalty, the settlement also requires a company-wide export audit conducted by an independent third party of all transactions connected with Cuban customers.

Assistant Secretary Mills also commended the BIS Office of Export Enforcement’s Dallas Field Office for its work on the investigation.

Background

BIS controls exports and reexports of dual-use commodities, technology, and software for reasons of national security, missile technology, nuclear non-proliferation, chemical and biological weapons non-proliferation, crime control, regional stability, anti-terrorism and foreign policy. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit www.bis.doc.gov. Parties who may have been involved in violations of the EAR are encouraged to submit a Voluntary Self Disclosure (VSD) to the BIS Office of Export Enforcement.